Displaying items by tag: Government
Australia: Adelaide Brighton has raised concerns about a South Australia state plan to build housing and tourism facilities near to its Birkenhead cement plant in Adelaide. At a public meeting held by the Development Assessment Commission, a local planning body, the cement producer expressed its concerns that building more housing would create more complaints about the plant’s activities, according to the Portside Messenger newspaper. It added that the government should consider building buffers to reduce noise and dust pollution from the site. The local government wants to build a tourism development near Cruickshank’s Beach and the cement plant.
Legal officer arrested for causing loss at Malabar Cements
31 January 2017India: The Vigilance and Anti-Corruption Bureau, a corruption body in the state of Kerala, has arrested Prakash Joseph, a legal officer at Malabar Cements, in relation to a loss of US$0.4m. The state-owned cement producer signed a contract with a company owned by businessman VM Radhakrishnan to sell cement, according to the Hindu newspaper. Staff at Radhakrishnan’s company withdrew a deposit for the deal without the knowledge of Malabar Cements. Prakash Joseph allegedly misinformed his employers about the location of the court handling a legal challenge to the withdrawal. Radhakrishnan has previously been investigated by police in connection to corruption charges at Malabar Cements.
South Africa: The Congress of South African Trade Unions, a federation of unions, has publicly complained about government permission granted to China’s CBMI Construction to bring workers into the country. CBMI Construction was awarded a tender for a US$90m upgrade project at PPC’s Slurry plant in 2015 and the union says it was allowed to import 242 Chinese workers to work on it. It is alleged that these workers have been working in the country since October 2015 and will continue to do so until 2018. The federation has asked the Department of Labour to look into the issue.
Local government votes against Colacem plant project in Ontario
26 January 2017Canada: The Champlain Township council in Ontario has voted against planning changes to allow Colacem to build a cement plant in nearby L’Orignal. However, the United Counties of Prescott and Russell have voted in favour of the project, according to the Review newspaper. The cement producer requires approval from both bodies in order to proceed with the project. It wants to build a 3000t/day cement plant at the site next to a limestone quarry it already operates.
Cemex announces successful take-over bid of Trinidad Cement
25 January 2017Trinidad & Tobago: Cemex’s indirect subsidiary Sierra Trading has successfully made its offer and take-over bid for Trinidad Cement. The subsidiary received the Foreign Investment License from the Trinidad & Tobago Ministry of Finance confirming that all terms and conditions of an amended offer made in January 2017 had been accepted.
Cemex increased its offer to buy a controlling stake in Trinidad Cement in mid-January 2017 with a value of up to around US$100m. However, the directors of Trinidad Cement recommended twice that its shareholders reject the offer. Although Cemex has passed the threshold required to take control of Trinidad Cement its share offer will remain open in Jamaica for local shareholders until 7 February 2017 due to local legislation.
The other side of the wall
18 January 2017With president-elect Trump due to take office this week we wonder what this means for the cement industry in Mexico. In 2016 this column looked a couple of times at the implications of Trump upon the US cement industry. First, we looked at who might benefit if he builds his wall along the Mexican border and then we wondered what his policies might mean for the US industry. To answer the latter first, the main issues for the US industry are infrastructure, changes to the Environment Protection Agency (EPA) and the repercussions if Trumps serious about a trade war with China. So long as a trade war doesn’t happen then Trump is probably good news for the US cement industry. As for Mexico, the joke has been that Trump will be good for the construction business ever since market analysts Bernstein’s passed a note around in the summer of 2016 about that wall.
Graph 1: Breakdown of Mexican cement industry by production capacity. Source: Global Cement Directory 2017.
The makeup of the domestic Mexican cement industry hasn’t changed too much in the last decade, even with the merger between Lafarge and Holcim, preserving the same market share in production capacity between the companies. Most of the producers have reported growth in 2016. Cemex reported that its cement sales volumes rose by 3% for the first nine months of 2016 and by 10% in the third quarter of that year. Overall though, its net sales fell slightly to US$2.16bn in the first nine months, alongside a fall in ready-mix concrete sales volumes. Cemex, crucially, also seems to have taken charge of its debts in 2016, saying that it was on track to meet its targets and that it had announced nearly US$2bn worth of divestments in that year. Currently the company is trying to buy out Trinidad Cement in the Caribbean, which may be a sign that it has turned a corner.
Grupo Cementos de Chihuahua’s (GCC) cement sales volumes rose in the first three quarters of 2016, in its case by 4%. Its overall net sales in Mexico rose by 4.2% in Mexican Pesos for the same period but fell when calculated in US Dollars due to currency variations. GCC attributed its sales growth to better pricing environment and increased cement volumes, mainly for projects in the commercial and industrial sectors that compensated for a decline in the public sector, following the culmination of two major urban paving and highway construction projects in 2015. At the smaller end of the market, Elementia reported that its cement sales skyrocketed by 30% to US$104m in the first nine months of the year aided by higher prices and volumes.
The major Mexican cement producers all have a presence in the US with the exception of Cruz Azul. Cemex has held assets north of the border for years, Cemento Portland Moctezuma has links to Buzzi Unicem, GCC bought US assets from Cemex in 2016 and Elementia completed its purchase of Giant Cement also in 2016. These companies have clinker in their kilns in plants on US soil manned by US citizens. This represents investment in local industry and it is exactly the kind of thing that appeals to the rhetoric of Trump’s approach so far. If the new president builds his wall then Mexican producers will probably be producing much of the cement that builds it. Even the Mexican Peso’s slow decline since 2014 could help the local cement industry, as it will cut the cost of moving exports and materials north of the border. Indeed, Enrique Escalante, the chief executive officer of GCC said in late 2016 that his company was ‘ready to build’ Trump’s wall.
However, the sheer uncertainty factor of an incoming president with as little experience of public office as Donald Trump must be giving chief executives pause for thought. After all, Trump's tweets before he has assumed office have forced car manufacturers to change policy. If he manages to disrupt the North American Free-Trade Agreement (NAFTA) in order to protect US jobs then the repercussions for the Mexican economy will be profound. It sends nearly three quarters of its exports to the US. Local cement producers would surely suffer in the resulting economic disruption.
So, currency devaluations aside, Mexican producers are making money from their cement operations at home and they are increasingly hedging their bets by operating or buying units in the US. Some, like GCC, are even being ebullient about the benefits that might come their way. It may be a bumpy ride but the Mexican industry is ready. However, it may wish to avoid appearing in any of Donald Trump’s tweets anytime soon.
Spain: LafargeHolcim’s Sagunto cement plant in Valencia cut its production by nearly 10% in 2016 due to a fall in exports to Algeria. The plant exports 85% of its production and Algeria cut its imports by half, according to the Expansión newspaper. The plant is considering new export destinations including Colombia. However, its permit to mine aggregates from the Salt de Llop quarry is due to expire in December 2017 and the local government is reportedly not keen to renew it.
Russia: The Federal Antimonopoly Service (FAS) has issued warnings to companies certifying cement products that certification has been mandatory since March 2016. The competition body reported that the decision by Cemiscon and SibNIIcement to refuse some applications for certification without adequate grounds could restrict competition in the cement market. The FAS has since warned the companies that their actions broke the law.
Aumund wins order for six production lines in Egypt
11 January 2017Egypt: Aumund has won a contract to supply clinker conveying equipment for six production lines. The tender is part of a project by Chengdu Design & Research Institute of Building Materials Industry (CDI), a subsidiary of Sinoma International Engineering, to build the 6000t/day lines for the government. No value has been released for the order.
The lines will each be equipped by Aumund with four 650t/hr BWG belt bucket elevators and three 550t/hr BWZ chain bucket elevators. The machinery package also includes four 170t/hr BWG-L belt bucket elevators, one 80t/hr BWZ-L chain bucket elevator and six 375t/hr pan conveyors for each of the six lines. Altogether the order comprises 108 machines.
The new project in Beni Suef is to be completed by the end of 2020. The pilot phase of the new production lines is due to start as early as December 2017. Aumund will supply the machines to Egypt in three deliveries, between April and June 2017.
Belarus: The Belarusian government has reduced its national plan for the production, consumption and export of cement from 2017 to 2020. The national cement production target has been set at 4.5Mt in 2017, 4.7Mt in 2018, 4.9Mt in 2019 and 5.1Mt in 2010, according to local media. During this period it is anticipated that the country’s cement production capacity will fall to 5.9Mt/yr from 5.4Mt/yr. Exports of cement are forecast to reach 1.6Mt in 2017, 1.7Mt in 2018 and 2019 and 1.8Mt in 2020. Consumption of cement is planned to be 3.3Mt/yr in 2017, 3.4Mt in 2018, 3.5Mt in 2019 and 3.6mt in 2020. The country produces cement from three state-controlled integrated plants.